\nCaesars Entertainment CEO Gary Loveman has been called "The Experimenter" and the father of the modern comp after creating the most sophisticated customer-loyalty program the casino industry had ever seen.
\n\tBut his critics contend the former Harvard associate professor often failed to calculate the human aspect of the casino industry.
\n\tAs Loveman prepares to step down from his post in June, the results of his grand casino experiment are inconclusive. He will remain chairman of Caesars Entertainment after former Hertz chief Mark Frissora assumes the CEO position July 1.
\n\tLoveman did not return a telephone call requesting comment.
\n\tFrenetic growth at Caesars, which became the world\u2019s biggest casino company when it was bought by Harrah\u2019s in 2005, has come to a screeching halt, as the juggernaut, which owns or operates more than 50 casinos across three continents, suffocates under mountains of debt racked-up during a 2008 private-equity buyout.
\n\tThe debt, the recession, a saturated casino market, and tectonic shifts in the way Americans spend their entertainment dollar sent Caesars\u2019 main subsidiary into Chapter 11 bankruptcy in January. Caesars hopes to slash that unit\u2019s debt to about $8 billion from about $18 billion and start posting an annual profit \u2014 something Caesars hasn\u2019t done since 2009.
\n\tIt\u2019s a stark state of affairs and hardly a ringing endorsement of Loveman\u2019s tenure heading the company.
\n\tRajiv Lal, a senior professor of retailing at Harvard Business School, says Caesars\u2019 current finances shouldn\u2019t obscure a basic truth about Loveman: \u201cWhen he came to Harrah\u2019s, he really changed the rules of the game.\u201d
\n\tThe comp system he spearheaded, now called Total Rewards, uses analytics to precisely track customer behavior and tailor Caesars\u2019 marketing budget accordingly. It\u2019s arguably Loveman\u2019s defining achievement in the private sector, the brainchild of a man who spent years studying technology\u2019s impact on productivity.
\n\t\u201cThe most important thing he did is say \u2018Look, I really want to make sure that the amount of money we spend on marketing is commensurate with the size of the wallet of the customer,\u2019\u201d Lal says. \u201cWhen he instituted this program, he was able to assess with this statistical analysis what is the size of the wallet, or what is the customer\u2019s lifetime value, and allocate the marketing budget accordingly on an individual basis. \u201d
\n\t\u201cYou have to give him credit for doing that,\u201d Lal says.
\n\tChris Ireland, who tended bar for 27 years at Showboat Casino Hotel until Caesars closed the casino in August as part of a downsizing efort, concedes Loveman’s influence.
\n\tFor Total Rewards, Ireland says, \u201cundeniably the man deserves credit. It was so successful that everybody in the industry now has followed suit.\u201d
\n\tBut while Loveman may have had a gift for quantifying human behavior with algorithmic precision, among Showboat workers, Ireland says Loveman never shed a reputation as an aloof, numbers-obsessed pedant who didn\u2019t truly grasp the human aspect of the casino industry and the people who worked in it.
\n\t\u201cTo us it didn\u2019t seem like he had a seat-of-the-pants feel for the business. It was all analytics. It was spreadsheets and pie charts,\u201d Ireland says of the man MIT Technology Review dubbed \u201cThe Experimenter.\u201d
\n\tFor many, the ultimate affront came when Caesars announced it was closing Showboat even though the property was still reporting a profit to state casino regulators.
\n\tAssemblyman Chris Brown, who took to the Boardwalk in July to decry the announcement, has been calling for greater scrutiny over Caesars ever since.
\n\tAsked Friday about Loveman\u2019s legacy, Brown said the CEO\u2019s poor decisions have \u201cled to crushing debt and bankruptcy.\u201d
\n\tClosing Showboat was just one of the decisions \u201cthat he made for the global corporation … at the expense of working families in our county,\u201d Brown said.
\n\t\u201cIf the measure of success is leaving a place better than when you found it, then Mr. Loveman falls short in Atlantic City.\u201d<\/p>\n
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